How Sentry Is Helping Covered Entities Contend With Contract Pharmacy Exclusions

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With more and more drug manufacturers excluding their products from 340B contract pharmacies, covered entities are asking two questions: When does this end? And what should we do about it? At Sentry, we’re asking ourselves, how can we best support our customers in these challenging circumstances?

With drugs like AbbVie’s best-selling Humira, Merck’s Keytruda and diabetic drugs from five different manufacturers, it’s safe to say that the contract pharmacy exclusions are taking an ever-increasing bite out of covered entities’ 340B benefits and curtailing their ability to provide critical safety-net services in their communities. We know this from speaking with thousands of covered entity end-users, stakeholders, and advocates. One customer of ours, a large urban health system, has lost over $70 million in program benefits to date from Sanofi alone. The impact is real and has lasting effects on caring for the most vulnerable.

During our February webinar where we discussed the “Manufacturer Mayhem,” I did some unscientific polling of attendees to understand where our covered entities stood on issues such as sharing their data with manufacturers or third-party software platforms. Among the findings:

  • Most respondents said the contract pharmacy exclusions to date had reduced their 340B benefit by between 15% and 30%.
  • Asked about the effect those reduced benefits had on the covered entity hospitals, the most common responses were the elimination of staff and canceled plans to expand services to patients. Others said their employer had dialed back on the number of patients served or had eliminated entire service lines for patients.
  • Nearly half said they were still discussing whether to submit their claims data, while roughly a third said they were not comfortable sharing data with anyone.

Customers also expressed an overwhelming desire for Sentry to help them in various ways, and we’ve taken action.

Impact reports

Shortly after Eli Lilly enacted the first contract pharmacy exclusion in September 2020, Sentry began compiling monthly impact reports for each of our customers, available for free by request. As more manufacturers joined the fray, we broke each customer’s impact report out by manufacturer to provide them with a better understanding of how the policies were affecting their program benefits.

In addition to compiling detailed financial tallies to help them track their reduction in benefits, the impact reports assist covered entities in several other ways:

  • They can provide claims-level data based on the claim being excluded, as well as a summary of exclusions by contract pharmacy, if that pharmacy hasn’t excluded the claims from being sent to Sentry. That’s helpful for filing price discrepancy reports or administrative dispute resolution with HRSA, since the excluded drugs wouldn’t show up on a normal claims report because they lack 340B pricing.
  • Impact reports help pharmacy leaders adjust their budget projections and support decision making.
  • One of the drug companies has begun refusing to provide 340B pricing, even when covered entities agree to its stipulations to hand over claims data, unless they could show eligible prescriptions. Again, because 340B pricing wasn’t available, those purchases wouldn’t show up on normal claims reports, but we can track them in the impact reports.
  • The entities can demonstrate claims qualification before 340B pricing becomes available, should they decide data submission is their last and only choice to prevent further financial duress.

Functionality

In addition to tracking impact, we’ve made enhancements to our Sentrex contract pharmacy claims reports to allow users to slice and dice the data and meet the biweekly reporting burden. This allows CEs to be highly selective about what data to include and exclude when submitting it to manufacturers or third-party platforms. The customized claims report format puts covered entities in control of determining what data is necessary for which manufacturer.

We continue to develop enhancements as the situation evolves and covered entities need new strategies and capabilities. From the ability to connect to third parties or as an intermediary prior to submitting data, we’re considering all options, with the customer at the center of those decisions. Covered entity demands have changed and as a result, we’re changing.

Resources

Deciding whether to submit data to regain access to 340B contract pharmacy pricing is case-specific, with several benefits and drawbacks to weigh. Each covered entity has different risk thresholds, and entities should engage the C-suite along with their legal, privacy/security, finance and compliance teams in making a prudent decision.

To facilitate those conversations for our customers, we have prepared guides, “cheat” sheets, court summaries and articles to help decipher the various manufacturer letters and other information. And to help our customers, we knew we had to first assist our staff with where to go for information and how to stay informed with the latest updates.

We developed same-day, sometimes within-the-hour, SBARs (situation, background, assessment, and recommendations) to quickly educate our teams. We also created a one-stop-shop in our secure customer community that is updated as changes occur. Our customers have access to an informed account management team to discuss the latest updates chronicled in our weekly newsletter and direct access to connect with yours truly, our industry relations senior vice president.

Want to learn more about how we can collaborate with you? You can request a meeting with me here, or check out our blog or News and Events page.

Finding a lasting solution to the contract pharmacy standoff will take time and the involvement of different branches of government, covered entities and the drug manufacturers. In the meantime, Sentry is committed to doing everything we can to help covered entities weather the storm.

Lisa Scholz is Senior Vice President, Industry Relations at Sentry. She can be reached here.

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